AFG profit edges lower

Australian Finance Group has posted a 0.8 per cent decrease in net profit, but is optimistic about its future following the federal election result earlier this year.

AFG’s profit fell to $33.03 million, while revenue increased 6.6 per cent to $660 million.

Its return on equity was 33 per cent, in line with the prior period.

Settlements through its securities business grew sharply in the period, up 108 per cent on the 2018 financial year to $1.06 billion.

It declared a fully franked final dividend of 5.9 cents.

AFG managing director David Bailey was positive about the effect the Liberal Party retaining federal government would have on the company.

“The federal election outcome has removed much of the policy ambiguity clouding the industry and mapped out a pathway to deliver regulatory certainty for the business,” Mr Bailey said.

“With the full impact of the stimulus from the RBA and APRA’s amendments to serviceability assessments to play out, from an AFG perspective the challenging lending landscape reinforces the company’s value proposition and ensures mortgage brokers remain the dominant channel for home loans.”

Earlier this month, AFG signed a binding agreement to acquire Melbourne-based Connective Group in a cash-and-scrip deal worth around $120 million, which will create an entity with over 6,575 brokers.

AFG today said it anticipated the acquisition would be complete by the second half of this financial year.

Shares in AFG were down 0.68 per cent to trade at $2.20 each at 11.50am AEST.